McKenna drew financing questions as campaign complained about Inslee

Originally published May 28, 2012 at 8:00 pm

Updated May 28, 2012 at 10:01 pm

Republican Rob McKenna beefed up his spending from his attorney-general campaign account in the months before announcing he was running for governor. State campaign officials say that is allowed, as long as the money wasn't going to his gubernatorial race.

OLYMPIA — Thinking he might one day run for governor, state Attorney General Rob McKenna dumped the words “re-elect AG” from his campaign fund in October 2009 and changed it to “Friends of Rob McKenna.”

From then until he declared his candidacy for governor 19 months later, McKenna’s attorney-general campaign spent more than $500,000 on consultants, media relations, field organization and other campaign expenses.

That’s about five times what he spent during the same time period when running for re-election in 2008.

All of this is perfectly legal as long as the money was used only to re-elect McKenna as attorney general — not run for governor.

State records show McKenna told the state Public Disclosure Commission (PDC) that’s exactly what happened. In fact, McKenna said he did not make up his mind to run for governor until a week before he formally announced last June 8.

The PDC asked McKenna last summer about “sizable expenditures” paid out of his attorney-general campaign account in the months leading up to his announcement and “at a time when it could be assumed that his campaign for AG was winding down,” the records say.

A PDC finance specialist told McKenna in a phone call that the expenditures “raised some concern that those expenses were related to a possible gubernatorial campaign and should be paid for from funds raised for his gubernatorial campaign.”

It was widely assumed McKenna would run for governor after he was elected for a second term as attorney general, and Democrats were gearing up for that likelihood as early as 2009.

The PDC’s inquiry came as the McKenna campaign was questioning how his Democratic gubernatorial challenger, former U.S. Rep. Jay Inslee, was planning to handle cash from his own defunct re-election campaign fund.

Last July the agency indicated Inslee might be able to roll over around $1 million in contributions he had amassed from his congressional campaign into his race for governor. McKenna’s campaign fumed that such a move would be illegal.

The commission later reconsidered and put strict limits on money Inslee could transfer from his congressional account.

The PDC staff ultimately accepted McKenna’s explanation about his spending from the attorney-general re-election account, and the agency says it has no further questions.

Randy Pepple, his campaign manager, declined requests for an interview with McKenna.

Double-dipping rule

State law doesn’t allow a candidate to spend political contributions from one campaign to pay the expenses of running for a different office.

Part of the reason for the rule is to prevent double-dipping — that is, collecting donations for one campaign and then having the same donors contribute again to a second campaign.

Candidates can transfer money from one campaign to another with the permission of contributors, but it counts toward their contribution limits.

McKenna has transferred about $98,000 from the attorney-general campaign to the gubernatorial campaign using that method. Inslee has moved about $600,000 from his congressional account to his gubernatorial campaign.

But there’s nothing wrong with a candidate building up a staff and political network to run for one office, then deciding to run for another and using that same organization.

“There’s nothing in state law that says a candidate who ends one campaign mid-cycle to begin a campaign for a different office has to start from scratch,” Lori Anderson, a spokeswoman for the PDC, said in an email.

If there are items, such as computers, that still have value when passed from one campaign to the next, those costs have to be reimbursed, and McKenna’s gubernatorial campaign says it has done so.

Common practice

State records show McKenna raised and spent money at a much faster clip in preparing for the 2012 attorney general’s race than he did during the 2008 campaign.

Matt Barreto, a political-science professor at the University of Washington, said a lot of incumbents eyeing higher office do the same thing. The additional spending allows them to beef up their campaigns and tout their accomplishments before making the leap.

“It’s a very common practice,” Barreto said. “You do see these blips in fundraising and spending when candidates are thinking about moving on to other seats.”

Pepple said McKenna boosted his spending because the state Democratic Party was expected to aggressively attack McKenna throughout the election cycle.

“Rob knew he would be running a statewide campaign in 2012 and needed to be ready for this increased level of attack, whether that race was for re-election or governor,” Pepple said in an email.

In the 19 months preceding his candidacy for governor, McKenna raised more than $612,000 and spent $558,000. During the same time period in his previous campaign, he raised about $204,000 and spent $113,000.

After he changed the name of his campaign fund in 2009, the re-election account paid more than $300,000 to various services, people and consulting firms later employed and paid by the gubernatorial campaign, PDC records show.

For example, from January through April 2011, the re-election account paid $53,000 to Tolo Strategies, a political consulting firm.

Then in May — the month before McKenna announced for governor — the entire three-person staff of Tolo Strategies went on the re-election campaign payroll.

They now work for the gubernatorial campaign, as political director, policy director and digital director.

Pepple said that one of the Tolo employees had worked on McKenna’s 2008 re-election campaign.

“As the legislative session closed in 2011 and a campaign office was opened for the attorney-general race, they were approached individually to determine if they wanted to come to work on the campaign as staff members,” he said.

Pepple said McKenna did not decide to run for governor until late May, in part because it wasn’t clear whether Gov. Chris Gregoire would run again.

“Toward the end of May, Rob decided he would run regardless of what the governor decided to do and that he needed to get started,,” Pepple said by email.

Gregoire announced she would not run for re-election six days after McKenna announced his candidacy for governor.